Clarification of the Concept of Double Pension & Restoration of Pension

Some press reporters are partly responsible for giving misapprehensions and false hopes to the 75 years and more old pensioners that their pensions would be doubled as per court orders. The news items led them to believe that whatever they were drawing before reaching the age of 75, they would start getting twice that amount (once the relevant orders are implemented) from the date of their 75th birthday. And those who indeed pinned up such high hopes better abandon the same. Yes, theoretically it is still possible if no increase in pension was allowed during the 15 years' period after retirement at the age of 60. I will provide here the Clarification of the Concept of Double Pension at 75 Years/Restoration of Pension.

Understanding the Concept of Double Pension

Let’s understand clearly from the very start that service tribunals and courts simply issue those orders which in their opinion are supported by relevant service laws. Pension matters are also dealt with by tribunals and courts under the relevant legal provisions about pension.

And let us further appreciate that there are no such provisions in any pension rules and regulations that upon reaching the age of 75, the amount of pension would be doubled. Yes, if a pensioner retired before 1.12.1001 at the age of 60, and if no increases were allowed for 15 years, only then the pension would be doubled when the pensioner is 75.

Restoration of Pension With View of History

One has to go back to amendment made in 1985 in pension regulations to appreciate the benefit recently granted to pensioners by service tribunals / high court (upheld by the Supreme Court too, through rejecting government appeals against those orders).

Before O.M. No. F.10 (8)-Reg. (6)/85 was issued on 25 June 1985 by the Ministry of Finance, surrender of pension against gratuity or commutation was absolute i.e. final and irreversible. Pensioner would receive lump sum in advance as the consideration for surrendering 25% or 50% of pension for good, and would continue to receive net pension (amount remaining after reducing surrendered amount from gross amount of pension).

Pension benefits were liberalized through the 25 June 1985 orders which allowed the surrendered part (previously forgone for good) to be restored (added back to net pension). This benefit, effective from 1.7.1985, was to materialize on expiry of the period for which the pension was surrendered.

At one stage this benefit was withdrawn in June 1995, but the withdrawal letter was itself withdrawn ab initio in September 1995, and the benefit continued to be availed by all pensioners till some of the government servants opted for the 2001 payscales-cum-pension scheme.

Scheme of Revised Pay Scales 2001 & Restoration of Pension

The 2001 pay scales-cum-pension scheme, introduced by Finance Division through O.M. No. F.1 (5) IMP/2001 dated 4 September 2001 envisaged that benefit of pension restoration would not be admissible to the opting government servants. All government servants were given the choice either to opt the 2001 payscales-cum-pension scheme, or to retain the old 94 scales and then existing pension benefits. In view of immediate benefit in pay and resultant benefit in pension amount, most of the public servants opted for the 2001 payscales-cum-pension scheme. They thus accepted in writing that commuted part of their pension would never be restored.

The 2001 pay scales were to take effect from 1.12.2001. However, persons retiring between 1.7.2001 and 30.11.2001 were also given the option either to get pension in 1994 pay scales and continue to avail the restoration benefit or to opt for the 2001 scheme.

The 2001 scheme further envisaged that pension increases from 2001 onwards would be admissible to all current and future pensioners on Net (Gross less surrendered) pension only. Earlier increases were granted on the Gross pension. Accordingly, existing pensioners also stopped receiving increase on commuted part of pension from 1.12.2001, though their title to restoration continued.

Court Decisions & Restoration of Pension

Federal Service Tribunal ordered on an appeal that the increases in pension (not granted from 2001 onwards on commuted part of pension) should also be granted from date of restoration (of commuted part). It was argued in the appeal that upon restoration of 50% commuted pension, both halves of pension, enhanced through various increases, should be at par (equal). It was against the norms of justice for one half of pension to be less than the other half.

Later, in many other cases, Lahore High Court and Service Tribunal upheld similar cases. However, in all cases, the benefit was allowed with effect from date of restoration, and no arrears before that date were allowed.

Example of the Restoration of Pension

In order to illustrate how the two halves of pensions [the commuted one, and the Net one (after commutation)] would not be at par [unless all increases are also given on commuted part] please see the following example. A gross pension of Rs.200 is taken in this example and the pensioner got 50% of his gross pension (Rs.100) commuted upon retirement on 1.6.1996

Retired on

1.6.1996

Gross Pension

Rs.200

Commuted for 15 years

Rs.100

Net Pension - 1.6.1996

Rs.100

Restored on

1.6.2011

From date

Effect of increases up to restoration date

Un-Commuted (Net) Part

Commuted Part

Before

Increase

After

Before

Increase

After

Rs

%

Rs

Rs

Rs

%

Rs

Rs

1.7.97

100

10

10

110

100

10

10

110

1.7.99

110

25

28

138

110

25

28

138

1.12.01

138

5

7

144

28

5

1

29

1.7.03

144

15

22

166

29

15

4

34

1.7.04

166

8

13

179

34

8

3

37

1.7.05

179

10

18

197

37

10

4

40

1.7.06

197

15

30

227

40

15

6

46

1.7.07

227

20

45

272

46

20

9

55

1.7.08

272

20

54

327

55

20

11

67

1.7.09

327

20

65

392

67

20

13

80

1.7.10

392

20

78

470

80

21

17

97

1.6.11

Total increase

370

Total increase

106

As illustrated in the above example, increases for 1997 and 1999 were given on gross (both halves of the pension), whereas increases from 2001 to 2010 were given only on Net pension.

Net effect of 2001 orders can be seen from bottom line in the example showing total of increases up to 1.6.2011 as Rs.370 on un-commuted half of pension while it was only Rs.106 on the commuted half of pension. High court / tribunal held that upon restoration, both halves of pension should be equal, and therefore increases should be allowed on commuted part of pension also upon restoration, though no arrears would be admissible before the restoration date.

Appeals and review petitions by government against the High Court and Tribunal orders were rejected by the Supreme Court of Pakistan.

The Supreme Court had earlier decided in certain cases that if a service matter involved many government servants; and some of them went into litigation while others did not, then the benefit (if allowed to the litigating government servants) would be applicable to those government servants also, who are equally placed, but did not go for litigation.

Keeping these orders of Supreme Court in view, Finance Division had ultimately to concede through O.M. No.F.13(13)-Reg.(6)/2011 dated 11 March 2013 that increases in pension [not granted on commuted part of pension from 2001 onwards], are to be allowed to all equally placed pensioners whose commuted part was later restored after 1.12.2001.

As explained in the example above, all those pensioners whose respective commuted part of pension has been restored after 1.12.2001, are now entitled to receive the difference between two halves of the pension, from the date of pension restoration. No arrears prior to the restoration date are however admissible.

Request to the National Newspapers:

I also request to the National Newspapers to publish it for the benefit of many an old pensioner in their esteemed newspapers.

By: Mr. Agha Amir (Canada)

Summary

Article Name

Clarification of the Concept of Double Pension at 75 Years

Description

Restoration of Pension after 70 Years Age has been allowed by the Finance Division. Here is the Clarification of the Concept of Double Pension at 75 Years.

29 Comments

AOA, MY FATHER HAS BEEN RETIREMENT FROM 5 JANUARY 2004. HE DIED IN 2011, NOW MY MOTHER IS TAKING PENSION, CIVIL AVIATION AUTHORITY RULES ARE 72 YEAR FOR RESTORATION. WHEN WILL BE THE PENSION RESTORED. WOULD YOU TELL ME.

Hello every one I wants any circular which clears that after 60 years mature retirement person is eligible for restoration of pension .my father was retired from eobi in 2004 now he wants clarification letter or strong document for evidence to avail this benefit.

Your personal attention is invited towards matter mention here and I want to ask you that Is a widow of in-service Government employee (who dies while during service) eligible for restoration pension portion or not? If yes, what is the rule and reference, following by which, my mother can apply for this facility. My history is that my father was serving in Irrigation Department who expired while during service on 22.10.1993. The Government of Punjab as well as Federal Government of Pakistan issued Notifications for Restoration of Surrendered Pension Portion, in light of orders passed by Hon'ble Supreme Court of Pakistan. I want to apply for restoration of said pension portion. Please tell me that what is rule and reference under which my mother can apply for claim of restoration of surrendered pension portion. Please draw your personal attention and brief us about this purpose to solve this important issue. I'll be grateful to you for this act of kindness and assistance. An early reply / co-operation is requested please.

Respected Ms Shumaila kamal,
Most respectfully, prior to the revision of BPS-2001,ie on Ist Dec1999 I had already moved to BPS-15. Later, I opted for 2001 BPS. As a result of my BPS-2001 option, while fixing my Pay in the revised Pay Scale, as the move over facility was discontinued, hence my pay as per formula, was in-indiscriminately reverted to my parent scale and was fixed in BPS-14. Later, at a passage of time, as the "commuted portion of Pension" since "discontinued along with move overs, of so many deserving employees, has now been restored, hence it will be much appreciated if the undersigned is guided about any decision pertaining to avail the withheld benefit of move over, of BPS-2001, instantly.

According to above letter, the pension of the pensioners who crossed the age of 75 years is being restored in Pakistan Railways Department.
But the restoration of pension of widows who are entitle to restore according to record of their husbands are not being restored according to new policy.
Whether a separate letter will be issued for widows. Please clarify with proof.
Thanks in advance.

Aoa my father he got retirement. Now he is 71 years old..he's getting pension ..he's government servant. He has been serve as principal for 41 or 42 years.thsi rule is for 70 years ??? Can I get all information about this please.

Respected Sir, my father was retired in the year 1986 and was expired in the year January, 1997 at the age of 58 years. My mother is reeving family pension since his death. The date of Birth of my father is April 1938 and April, 2013 his age was 75 years. The Department has issued letter to my mother for restoration of 50% pension. They demanded Copy of Pension Book, CNIC, and original Affidavit/Undertaking for restoration of Pension in the moth of November, 2013. But it is regretted to inform that a lapse of time has been spent neither any reply nor restoration of pension by the Department. The question is whether my mother entitled restoration of Pension benefit or not. At the time of death of my father, my mother has received 205/- and commuted pension of Rs. 205/- kept by the Department in the year 1997. Therefore, only Rs. 205/- was received by my mother in the year 1997. Now the present pension is Rs. 4300/- How much benefit shall receive by my mother. Waiting for reply.

If age of your father on retirement was 48, then he must have received commutation value for about 25 years, and therefore restoration of commuted part would fall due 25 years after retirement. That means in 2011 !

Following particulars are needed to ascertain present entitlement of family pension

A.O.A THANKS DEAR MADAM SENDING FOR EXCELLENT INFORMATION FOR ALL EMPLOYEES AND ALSO RETTIRED AND WIDOWS PENSIONS INFORMATION RESTIION / INCREASE ALL AND SAME MAY BE PUBLISHED OR SEND VRISION URDU PLEASE SO NICE THANKS MAY ALLAH PAK GIVE MORE SCUCESSES FOR BRIGHT FUTURE PLEASE I AND WE PRAYS AND ALSO BEST WISHES REGARD.

Dear Agha Amir AoA, Sir, thanks for sharing excellent information for retired persons.I really admire your work for us. I am already in contact with you and will be sending our data for your guidance and advice. presently i am seeking your help for getting authority for 10% increase in pension on 1-7-1997 shown in the table above for calculation of increases in pension at the time of restoration of commuted pension. Increase of 10% in pension during 1-7-1997 had not been given to us By CAM(O). If there was an increase then we may have to take up the case with concerned authority for adjustment. I would be highly obliged if you can send some reference in this regards. God bless you and your family.